Streetcar dispute headed to court

Duke, city agree to disagree; way clear to start construction

Feb. 2, 2013

Written by

Barry M. Horstman

The Big Number

2014 The year streetcar tracks in Over-the-Rhine are expected to be completed and the first cars are to be delivered.

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Major construction on the Cincinnati streetcar is expected to begin this spring, but it will be up to a court to decide whether City Hall or Duke Energy pays an estimated $15 million to relocate utility lines for the project.

Removing one of the final procedural hurdles for the $110 million-plus streetcar plan, Cincinnati Mayor Mark Mallory and City Manager Milton Dohoney Jr. on Friday announced that the city and Duke had agreed to allow a judge to decide what the two sides have been unable to resolve themselves after months of talks.

With the streetcar currently scheduled to be completed by the spring of 2016, city leaders also said they will try to expedite construction so that the system would be available when Major League Baseball’s All-Star Game is played in Cincinnati in 2015. However, Mallory and others cautioned that a summer 2015 starting date for the Downtown riverfront-to-Over-the-Rhine streetcar line is, at best, a slim possibility. “No guarantees,” Mallory said.

What Friday’s deal does guarantee, though, is that construction of the streetcar project is imminent, with Duke expecting to start utility relocation work later this month or by early March.

“From the beginning, I said that we would come to agreement with Duke, and we have,” Mallory said at a news conference at his City Hall office. However, on the big question of who should pay to relocate Duke’s utility lines, what City Hall billed as an agreement is essentially an agreement to disagree that puts the contentious issue before a Hamilton County Common Pleas Court judge.

Duke, arguing that its utility lines would not have to be moved were it not for the streetcar project, contends that City Hall is responsible for the cost. The city, however, insists it should not have to compensate Duke for moving utility lines as part of a public improvement project.

Under the deal, Duke agreed to go to court within 15 days to seek a declaratory judgment on the city’s potential legal and financial liability. The timing of that decision is uncertain, and whichever side loses in Common Pleas Court almost certainly will appeal, given the amount of money and legal precedent at stake.

In addition, Duke currently is seeking approval of a measure from the Public Utilities Commission of Ohio that would permit the company, in the event City Hall prevails in court, possibly to pass on the relocation costs to gas and electric ratepayers within the city. From that perspective, if the PUCO sides with Duke, a court victory for City Hall still potentially could be a financial loss for Duke customers who live within the city of Cincinnati.

The streetcar already has become a major issue in this year’s mayoral campaign, producing a clear philosophical division between City Councilwoman Roxanne Qualls, a streetcar backer, and former City Councilman John Cranley, a strong opponent.

Cranley was incredulous Friday over the city’s claim that it had made a “deal” with Duke. “There’s no deal,” he said. “There’s a lawsuit that’s going to be instigated” – and for which taxpayers will pay. “It’s just depressing,” Cranley said.

Even a protracted court battle, however, will not delay the streetcar’s construction, because Duke has agreed to begin relocating its utility lines while awaiting a decision.

The company also has made another concession, agreeing to relocate only those utility lines in conflict with the streetcar tracks or for which access is within three feet of the tracks. Initially, Duke insisted that eight feet of clearance would necessary in order for crews to perform maintenance duties safely. The company also said, however, that it would be willing to accept the three-foot margin provided that an operating agreement spelled out details guaranteeing work crews safe access to Duke’s lines.

“We’re pleased that that issue has been resolved and is now off the table,” said Duke spokesman Blair Schroeder. “We believe in this project, and we’re going to do everything we can to move it along.”

The relocation question is one of numerous obstacles the streetcar has faced in recent years, including two failed attempts to derail it via ballot measures and Ohio’s withdrawal of nearly $52 million in funding in 2011. The state’s action, which came after then-newly elected Gov. John Kasich questioned the streetcar’s projected economic benefits, forced the city to scale back the planned route.

Despite the challenges, the city has determinedly pushed ahead. Last year, the city selected CAF USA, the subsidiary of a Spanish company, to built five sleek, European-styled streetcars, the first of which is expected to be ready by mid-to-late 2014. Tracks in the Over-the-Rhine section of the route are to be substantially completed by about the same time, allowing vehicle operators and maintenance crews to begin training.